South Loop condos auctioned at big price cuts
(Crain’s) — A weekend auction of 45 units in the Vetro condominium project in the South Loop resulted in sales of more than $12 million, at sharply discounted prices.
After an aggressive marketing campaign, the 45 units in the 232-unit building sold at an average price of $258 a square foot, or 73% of the average pre-auction asking price of $353 a foot, according to Accelerated Marketing Partners LLC, which conducted the auction, and Chicago-based residential marketing firm Garrison Partners Inc. The sales totaled more than $12.1 million.
The Vetro auction gave a jump-start to the 31-story tower at 601 S. Wabash St., completed in late 2007, where sales had been stalled like in the rest of the market.
Lenders on other slow-moving downtown condo projects also are considering forcing developers to hold auctions, said Garry Benson, president and CEO of Garrison, which has formed an alliance with Boston-based Accelerated for future Midwest sales efforts.
“The question will be, what is the real depth of the marketplace, and will the next auction produce the same results?” Mr. Benson said.
The Vetro prices were better than expected despite the steep discounts, he added.
Typically, auction prices on similar projects are somewhere in the mid-60% range of the pre-auction prices, Mr. Benson said. For Vetro, the minimum auction prices were 61% of the asking prices, according to a price list.
Some prospective condo buyers have been sitting on the sidelines, waiting to see how far prices have fallen. The Vetro auction sets a floor for future sales at the project, which was completed by Evanston developer Roszak/ADC LLC. About 60 units remain unsold.
Both Roszak and Chicago-based construction lender Corus Bank approved the sales prices, Mr. Benson said.
During the fourth quarter, more prospective buyers walked away from contracts than signed new contracts, according to a report by Chicago-based Appraisal Research Counselors.